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Our friend Italian Dragon has posted a great article about the danger's of over investing in short.coms. I've copied a portion of his message and added in my own two cents at the end. ..............................................................................................
Some of you may know that I have been dealing professionally with the stockmarkets for a good amount of years in the past.
Well, this gave me a good experience that I find very useful in the domain industry, especially right now.
Do you remember what happened on March 6 of the year 2000 ?
The Nasdaq hit the highest score of its (young) lifetime well above 5000 points.
Since then I have been watching pretty much everything from insider trading, pump and dump, big companies going broken such Enron, and a whole lot of other financial issues.
Lately we have been seeing the real estate bubble finally bursting at least in the U.S. and in the UK.
I could write a 10 hour essay on this topic but I want to keep it simple:
Markets are cyclic, the smart investors buy when everyone is selling and sell when everyone is buying.
But only a fool would put all his money in one asset (don`t put all your eggs in one basket) , and I would certainly invest only what I can loose in domains as this is still a new alternative investment.
My personal situacion is hitting me right now in the worst time , proving that if you got an emergency, it may hard to liquidate your portfolio at some times (obviously you must be pretty unlucky like me to need cash at the worst time of the past 10 years) but again on the opposite side for the ones who don`t need immediately money, it may be the golden oportunity that does not come up very often.
In short, I would advice people to invest only if they plan to stay in the business for at least 2 years. The others may need to think what they are doing.
I would not be selling 90 % of my portfolio if I could be here within the next 2 years as I`m confident that the U.S. economy will recover pretty fast and Google will keep printing that money that in few years made them the number 1 company in the WWW.
You can visit ItalianDragon.com and give him your best wishes, and also buy some of his names by going to http://italiandragon.com
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Noobs - I agree. Investing all your money into domains is foolish! Domaining is a very risky business. I'd venture to say that about 1% of domainer's make a large profit. The top half turn a small profit, and the other 50% just break even or lose their money.
Do your research, watch the trends, ask the experts, etc.. If you do decide to register some names, my advice would be to watch the countdown threads and try to register domains that may increase in value in the future. Register a few good ones and pay for a couple years registration fee and don't touch them. Also, register a couple of popular domain types to play with like LLLL.coms, L-L-L.coms, to practice buying and selling on the different venues. However, don't expect to get rich quick. It's easy to get caught up in daydreaming about $100,000+ sales. However, for the most part, a lot of new domainer's are happy if they can just break even, because the more they buy and sell, the more experience they gain.
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